Charter Hall Prime Office Fund acquires strategic Collins St property in Melbourne’s CBD

Charter Hall Office - CEO, Adrian Taylor commented on the acquisition: “The Group’s demonstrated ability to respond quickly to off-market opportunities means that we were able to acquire the property on pricing metrics favourable to recent comparable market transactions, securing a strategic site to expand the Groups $11.1 billion office portfolio. We see this investment, as an exciting opportunity to create and hold another landmark office tower providing our capital partners with access to sector leading institutional grade property investments. This further expands the total office development pipeline to $2.7 billion, with $1 billion under construction and predominantly pre-leased.”

Centrally located within the heart of Melbourne’s financial district, with almost 50 metres of northern frontage to Collins Street and 100 metres of frontage to King Street including the adjoining CPOF owned 55 King Street, the combined 4,620 sqm site provides a unique opportunity for CPOF to secure a major office development site in the Melbourne CBD subject to development approvals.

CPOF Fund Manager, Matthew Brown said: “Given the favourable Melbourne CBD office outlook as evidenced by record site sale prices such as 60 Collins Street and 150 Queen Street, we pursued this rare Collins Street corner site off market with the additional attraction of it adjoining our 55 King St property. The acquisition is consistent with CPOF’s investment strategy of acquiring sites in tightly held markets to expand the “develop to core” part of the investment strategy.”

The off-market acquisition follows CPOF’s US Private Placement of $413.3 million completed during FY18 and the recent $460 million equity raising further enhancing the Fund’s balance sheet, replenishing investment capacity to fund CPOF’s active development pipeline and strategic acquisitions.

“CPOF is putting to work equity raised that will help to further grow its existing portfolio of high quality assets. 555 Collins provides CPOF investors with a well located, increasingly rare under developed corner development site in the western core of Melbourne’s CBD, a location that has been heavily invested in and is favoured by major corporate, legal and government occupiers,” Mr Brown added.

The stretch of Collins Street from William to Spencer Street will accommodate three new premium grade projects to compliment the revitalisation of this prime CBD precinct, with major pre-lease commitments to Deloitte, the Australian Future Fund, Minter Ellison, King Wood Mallesons and HWL Ebsworth in recent years evidencing the appeal of this precinct.

Charter Hall’s Head of Office Development, Andrew Borger commented: “With CPOF’s $700 million development at 130 Lonsdale Street in Melbourne progressing well, this acquisition provides CPOF access to a strategic Collins Street super site helping to replenish the Fund’s existing development pipeline. We will work in partnership with both the Melbourne City Council and the Victorian Department of Planning to undertake a masterplan process to ensure that we achieve a city shaping development solution.”